Sister Schubert's rolls boost retail sales at Lancaster

by Eric Schroeder
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Sister Schubert's rolls, Lancaster Colony Corp.
Sister Schubert’s frozen dinner rolls turned in a strong performance for Lancaster Colony Corp. during the recent quarter.
 

WESTERVILLE, OHIO — Volume gains from Sister Schubert’s frozen dinner rolls, Marzetti caramel dips, Olive Garden dressings and New York Brand Bakery frozen garlic bread products contributed to organic sales growth at Lancaster Colony Corp. in the first quarter of fiscal 2018.

Net income in the quarter ended Sept. 30 totaled $29,386,000, equal to $1.07 per share on the common stock, down 12% from $33,400,000, or $1.22 per share, in the same period a year ago.

Net sales, meanwhile, increased 2.6% to $298,916,000 from $291,361,000. Retail sales increased 6% to $162,144,000.

David Ciesinski, Lancaster Colony Corp.
David Ciesinski, c.e.o. of Lancaster Colony Corp.

“We were pleased with the sales growth in our Retail segment that led to a record level of consolidated net sales in the fiscal first quarter,” said David A. Ciesinski, chief executive officer. “We will continue to rely upon our strengths in innovation and product development to drive top-line growth.”

During a conference call with analysts held Oct. 26, Mr. Ciesinski was asked whether the strong performance of Sister Schubert’s was surprising. Specifically, the analyst mentioned the fact the brand is competing in a category that isn’t necessarily on trend (frozen) and isn’t marketed as a healthier product.

“It’s a great story actually,” he said. “I won’t say I am surprised because I’ve been watching the team that’s been working on this for the year plus that I’ve been here. And they have really done a terrific job. They have done a couple of things. They have brought into the market consumer relevant innovation, one; they have also done a great job of simplifying the range of products.

Lancaster Colony Corp. brands - Marzetti, Olive Garden, New York Bakery
Volume gains from Marzetti caramel dips, Olive Garden dressings and New York Brand Bakery frozen garlic bread products contributed to organic sales growth at Lancaster Colony Corp.
 

“They’ve pruned nonperforming s.k.u.s (stock-keeping units), focusing on seven items and getting retail execution right. And candidly, if you look at our portfolio of brands, that may be the very most beloved brand that we have in our portfolio. It’s growing in retail and parenthetically, it’s also growing in food service.

“We usually don’t break it out and talk about, but it’s actually a strong performer in our food service business. … I think the other thing I’ll note on that is, what we’re finding is that if you look at the ingredient panel on that, it’s actually pretty clean. There isn’t a lot of bad stuff in that, and for the consumers, particularly in the south, where it is the strongest, it is very much a beloved brand.” 
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